New YouTube Paid Channels Could Shake Up Industry

iStockphoto/Thinkstock(NEW YORK) -- Google’s YouTube is venturing into the world of paid subscription content with Thursday’s announcement of a pilot run of paid channels. Subscription prices start at $.99 monthly, but many offer a discounted yearly rate.

The program is launching with channels from National Geographic Kids, the Professional Golfer’s Association, Ultimate Fighting Championship and HDNet. Every channel currently offered has a 14-day trial period with monthly billing beginning immediately after.

Revenue for YouTube content creators have, up to this point, been ad based, but most of the paid channels in this initial offering are ad-free. Channels have subscription price and advertising information clearly posted by the “Subscribe” button, so users will know whether the channel will contain ads before signing up.

“YouTube’s decision to allow channel operators to charge monthly subscriptions gives YouTube a huge competitive advantage over Netflix and Hulu when it come to new episodic programming,” TJ Walker, a media analyst and producer/host of YouTube news channel T. J. Walker News and Comment, told ABC News. “This could be the beginning of the end for traditional cable TV companies as well.”

Walker said he won’t be charging for his channel anytime soon, but certainly understands the desire for some YouTubers to create a sustainable business model by way of paid subscription offerings.

“If producers can reach viewers and charge them subscriptions directly through YouTube, it means a brave new world where middlemen like Netflix and Hulu get squeezed out and become as irrelevant as AOL dial-up service,” said Walker.

The Google TV platform, sold in the form of set-top boxes and televisions from companies like Sony and Vizio, features a dedicated YouTube app that supports the new paid channels.

A spokesperson for YouTube told ABC News, “Currently you can watch paid channels on many recent TVs running the new YouTube TV app, Xbox and Boxee devices.” The Apple TV is not yet supported, but the YouTube representative said, adding: “We’re working to expand this to more devices, as well as giving you the ability to subscribe to paid channels from these devices.”

Walker does believe, however, the ability to easily stream this YouTube content on the big screen means huge things moving forward.

“Younger people simply think in terms of video they want to watch when and wherever they want to watch it. And thanks to devices like Apple TV and iPhones that turn into great remote controls, the traditional TV set is now just another extension from the cell phone screen and the iPad screen,” Walker said.